“Enron-type accounting standards have become the norm,” says William Henderson of Indiana University, one of many exasperated law professors who are asking the American Bar Association to overhaul the way law schools assess themselves. “Every time I look at this data, I feel dirty.”

The financial crisis stretched even farther across the economy than many had realized, as new disclosures show the Federal Reserve rushed trillions of dollars in emergency aid not just to Wall Street but also to motorcycle makers, telecom firms and foreign-owned banks in 2008 and 2009.The Fed's efforts to prop up the financial sector reached across a broad spectrum of the economy, benefiting stalwarts of American industry including General Electric and Caterpillar and household-name companies such as Verizon, Harley-Davidson and Toyota. The central bank's aid programs also supported U.S. subsidiaries of banks based in East Asia, Europe and Canada while...

The Obama administration's latest estimate of taxpayer costs of the Wall Street bailout is too rosy and could ultimately damage public trust in government, the top bailout cop said on Monday. woodleywonderworks A SIGTARP report says the Treasury may have used misleading methods for calculating the cost of the bailout. In its quarterly report to Congress, the Special Inspector General for the Troubled Asset Relief Program said the Treasury Department's bailout cost estimate for American International Group was an example of using misleading numbers to paint a positive pre-election account of the program. The administration on Sept. 30 slashed its...

Politico’s new poll reinforces the fact that momentum remains strong with fired-up Republicans, mainly because of fired-up independents. The numbers look daunting for Democrats with just one week to go before Election Day, and in many places, past the time many have already voted. And it’s not as though the Democrats didn’t have warnings that their massive expansion of government wouldn’t have dire consequences: Expressing deep dissatisfaction with President Obama’s policies and performance, independents have increasingly sided with conservatives in the belief that government grew too large, too fast under Obama—and that it can no longer be trusted. In the...

(CNSNews.com) - When Rep. Nancy Pelosi (D-Calif.) gave her inaugural address as speaker of the House in 2007, she vowed there would be “no new deficit spending.” Since that day, the national debt has increased by $5 trillion, according to the U.S. Treasury Department. "After years of historic deficits, this 110th Congress will commit itself to a higher standard: Pay as you go, no new deficit spending,” Pelosi said in her speech from the speaker’s podium. “Our new America will provide unlimited opportunity for future generations, not burden them with mountains of debt." Pelosi has served as speaker in...

There’s basically zero popular support for several already unlikely initiatives the FTC is looking into in order to support the “reinvention of journalism.” Rasmussen Reports polled 1,000 people on whether they would support proposals—like a tax on consumer electronics to help news organizations or a taxpayer-funded program to support young journalists through AmeriCorps—and the answer was a decisive no. A monthly tax on cell phone bills? 90 percent no! A tax on consumer electronic devices? 84 percent no! The young reporter program? 70 percent no! A White House commission to help save journalism jobs? 55 percent no! (Via MediaPost) Most...

Cash for Appliances likely to draw crowds to stores in California By Mark Glover mglover@sacbee.com Published: Saturday, Apr. 24, 2010 - 12:00 am | Page 1B California's Cash for Appliances program appears to be off to a strong start, but the first big test for retailers is likely to occur today when weekend buyers are expected to hit stores in big numbers. By early next week, consumers and appliance sellers will get their first clue on just how long California's rebate money is going to hold up. "Anecdotally, retailers are experiencing more sales than they've seen in a long time,"...

Broadway Bank, the family-owned lender that helped launch U.S. Senate candidate Alexi Giannoulias' political career, was seized by government regulators Friday night, one of seven Illinois institutions taken over and sold to healthier companies. The failure of Chicago-based Broadway, which was unable to raise the $85 million it needed to remain independent, was anticipated, and its worsening health has weighed on Giannoulias' Democratic bid for President Barack Obama's old Senate seat. The bank had been struggling in recent years with real estate loans gone bad, losing $75 million last year. Giannoulias worked for his father at Broadway before entering politics,...

For most old-school journalists, the equation is simple. Public disdain for reporters — ranked slightly above used car salesmen in one public poll — combined with a need to stay independent from the government as watchdogs, equals a situation where we can't take money from the government to survive. But there are some other numbers to consider: 5,900 full-time newspaper journalism jobs disappeared last year, according to the Project for Excellence in Journalism, with one-third of newspaper newsroom jobs gone since 2001. Newspaper advertising revenue dropped 22 percent in 2009, according to the PEJ. The historic way of funding great...

The Obama administration plans to overhaul how it's tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday. Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be their unemployment insurance, for up to six months. In some cases, administration officials said, a lender could allow a borrower to make no payments at all. The new push, which the White House is scheduled to announce Friday, takes direct aim...

The year 2010 is likely to be the pivotal year where pundits stop referring to the recession and begin openly talking about a depression. Our economic problem is rather simple to describe: There is too much debt relative to income and/or wealth. Below is a single graph that depicts the condition of our economy. It shows total debt of the U.S. as a percentage of GDP from 1870 forward. The debt figure includes all private and public debt. It does not include liabilities associated with unfunded government mandates like Social Security and Medicare. (Note: according to the U.S. trustees of...

WASHINGTON (CNN) – The banking system today may be in a more precarious position than it was a year ago, the man charged with overseeing a $700 billion bailout program said Wednesday. Neil Barofsky, the special inspector general managing the Troubled Asset Relief Program, told CNN's Wolf Blitzer on Wednesday that the government's decision to support bank mergers over the past year may have put the U.S. economy more at risk. "These banks that were too big to fail are now bigger," Barofsky said. "Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit...

Dilution to ensue as embattled bank bolsters capitalization NEW YORK (MarketWatch) -- Citigroup Inc. has finalized an agreement with the federal government that will recapitalize the company with $58 billion of new common stock and make the U.S. taxpayer its largest shareholder, the bank said Wednesday.Moving to bolster its capitalization, Citigroup /quotes/comstock/13*!c/quotes/nls/c (C 3.52, +0.11, +3.23%) unveiled an agreement under which the government will exchange up to $25 billion of the bank's preferred securities for interim securities and warrants. The deal, which puts a conversion price of $3.25 a share on Citi common, was originally supposed to be completed in...

The Obama administration will seek new powers for the Securities and Exchange Commission to force firms to let shareholders vote on executive pay and make directors who set compensation more independent, an administration official said. Today’s proposal, subject to congressional approval, would cover all public companies. President Barack Obama has long supported giving shareholders nonbinding votes on bonuses, salaries and severance packages. The administration also will name a “special master” to monitor compensation plans for firms receiving exceptional assistance in the financial rescue. The changes are aimed at reducing systemic risks and quelling a political uproar over bonuses paid to...

Penske Automotive Group, owned by racecar legend Roger Penske, will buy GM's castoff brand. NEW YORK (CNNMoney.com) -- Bankrupt automaker General Motors Corp. announced Friday that it will sell its Saturn unit to car dealership operator Penske Automotive Group.Penske (PAG, Fortune 500) is owned by former race car driver Roger Penske, who owns NASCAR and IndyCar racing teams. The deal would give Penske the rights to the 19-year old brand, but GM would continue production of Saturn's three highest-selling models, including the Aura sedan, and the Vue and Outlook cross-over SUVs.The deal, which GM expects to be completed in October,...

(H/T to Hot Air) It appears that GM will keep its lobbying arm even though it will pay lobbyists with tax dollars. General Motors will continue its multimillion-dollar lobbying operation in Washington, even after the federal government takes ownership of it. The automaker may even maintain its high-dollar lobbying contracts with some of the wealthiest and most influential K Street firms. “We believe we have an obligation to remain engaged at the federal and state levels,” General Motors stated in an e-mail after President Barack Obama announced his plan for the federal takeover of the carmaker, “and to have our...

NEW YORK (MarketWatch) -- Senior officials in the Obama administration said late Sunday the U.S. government will provide $30 billion in financing to General Motors Corp. to allow it to continue to operate through a historic Chapter 11 bankruptcy, expected to last an estimated 60 to 90 days.Officials confirmed that a majority of GM /quotes/comstock/13*!gm/quotes/nls/gm (GM 0.75, -0.37, -33.04%) bond holders approved the deal to allow the ailing car maker to restructure $27 billion in debt. See full story on GM bondholders. "For the better part of a century, the General Motors Corporation has been one of the most recognizable...

Bond vigilantes—investors who, in protest to the government's monetary or fiscal policies policy, sell bonds to purposely drive up yield on U.S. debt—are back after 15 years of remaining on the low-down, according to Bloomberg. Higher yields mean higher interest costs for the government, making the cost of borrowing more expensive and throwing the proverbial wrench in Fed Chairman Ben Bernanke's efforts to keep borrowing costs low for consumers and businesses while also trying to jolt the economy. The 10-year Treasury yield has risen 1.4 percent this year, pushing interest rates on 30-year fixed mortgages to more than 5 percent....

NEW YORK (Reuters) - U.S. government efforts to revive a sluggish economy have cheered markets since March, but some of the most successful investors around worry these moves may only make the bad times linger. Several hedge fund managers at an investment conference this week warned that a number of policy moves by the Obama administration, from its Chrysler intervention to Treasury's myriad bank bailouts, will only extend the recession. It would be better, they said, if the government let markets move unimpeded, causing pain now but clearing a path for sustainable recovery. "The basic strategy appears to be to...

German Chancellor Angela Merkel has revealed the US president helped swing a deal to save carmaker Opel from the imminent bankruptcy of its parent firm. She said Barack Obama helped clear some hurdles threatening the transaction during a phone conversation. Earlier, Germany agreed the deal with Magna International, a Canadian car parts maker, to take over Opel, part of the European wing of US carmaker GM. It should protect Opel if GM files for bankruptcy protection in the US. GM is expected to do this as early as Monday. Marathon talks"I spoke on the phone with the American president yesterday...

Elections have consequences. Like a stand-up comedian trying to push a catchphrase, Sen. John McCain, R-Ariz., kept coming back to that statement during an hour-long town hall gathering Tuesday in Marana. Whether it was efforts being made to turn around the economy, President Obama's nomination of Sonia Sotomayor for the Supreme Court or U.S. Rep. Nancy Pelosi's CIA allegations, McCain told the crowd of more than 200 people at the Marana Municipal Complex that today's America is a direct result of last November's voting. But rather than place all the blame on the ruling Democratic Party, McCain said Republicans were...

If money still had value, this would be shocking. Read » Bailing out our foundering auto industry will cost at least $83 billion, Time magazine reports. Here's how they get there: $4.1 billion from the Treasury to Chrysler in debtor-in-possession financing last week gets us to $8.2 billion federal loans. (Loans we won't ever see again.) $15.4 Billion for GM from the TARP, it could hit $27 billion before all is said and done. $5 billion went to GMAC. $1.5 billion to Chrysler financial. $5 billion to auto part suppliers. $4 billion for cash for clunkers. Billions more for covering...

Sergio Marchionne, Fiat chief executive, is on Monday due to outline plans to transform the global automotive landscape by spinning off Fiat’s core cars division, joining it with Chrysler and General Motors Europe, and creating a new publicly traded European car company.Mr Marchionne wants Italy’s largest industrial group to separate Fiat Auto from its other divisions, join them with Opel / Vauxhall, Saab, and GM’s other European operations, and Fiat’s stake in Chrysler to create a company with about €80bn ($106bn) of revenues and sales of 6m-7m vehicles a year – second to Toyota, more than Renault / Nissan or...

Newsweek’s Howard Fineman wrote in his "A Turning Tide?” column that “the establishment is beginning to mumble that the President may not have what it takes.” Fineman, firmly established in the establishment as Newsweek’s senior editor, reported that Obama is “dismissed as being in over his head by technocrats” and, more broadly, “in ways both large and small, what’s left of the American establishment is taking his measure and, with surprising swiftness, they are finding him lacking.” Obama’s stock is falling, stated Fineman, because of the $787 billion stimulus plan that’s not aimed clearly enough at job creation, the $400 billion...

Banks that accepted for taxpayer money to weather the financial crisis now have begun to rethink their position. After watching Congress break out pitchforks and torches over retention bonuses at AIG, suddenly government involvement in their business looks less than welcome, especially mindless fanning of populist rage over what is considered fairly normal compensation options. Banks that can afford to bail out of the bailout are looking for the exit: For relatively strong banks, doing business with the government may be more trouble than it’s worth.Banks are publicly declaring their intent to pay back loans from the Troubled Asset Relief...

LONDON (MarketWatch) -- American International Group Inc has been forced to post more than GBP500 million as collateral to cover possible defaults on rental payments on properties in Canary Wharf leased by Lehman Brothers Holdings Inc. and Citigroup Inc. The move was triggered by a fall in the credit rating of AIG, which provides securitization to insure the leases. AIG posted cash collateral of approximately GBP224 million to cover Lehman's lease on 25-30 Bank Street and GBP276.3 million to cover Citigroup's rental obligations at 33 Canada Square. There is no suggestion that either tenant is likely to default, even though...

Speaking at the Heritage Foundation, Sen. John McCain (R-Ariz.) said he opposed the 90 percent tax on AIG bonuses that passed the House. “I don’t support bills of attainder,” he said, to loud applause. He said he opposed the idea of controlling the salaries and bonuses of TARP-taking executives, focusing instead on creating a subcommittee to see where the money was going and to oppose any more bailouts. “The problem started when we bailed out AIG,” he said. “I would have let AIG go bankrupt. If they have to fail, they fail.”

WASHINGTON (AFP) — The US government's chief overseer of bank bailout funds announced Thursday a probe into the Treasury's handling of hugely controversial bonuses paid by bailed-out insurer AIG.The announcement by Neil Barofsky, the special inspector-general of the Troubled Asset Relief Program, turned up the political heat on Treasury Secretary Timothy Geithner amid Republican calls for his resignation.In testimony to the House Ways and Means subcommittee on oversight, Barofsky said he would "act aggressively to recover the taxpayer's money" if wrongdoing is found at American International Group itself."We're launching an audit that, as part of a larger review of executive...

Despite contrary news reports, sources in the Obama administration insist they did not know until just last week that AIG was paying employees big bonuses. But it doesn't matter when they figured it out, said Arizona Senator John McCain. The Republican senator told the Fox News Channel the real screw-up is that the bonuses were allowed. "What's this, the fourth package that they've gotten of tens of billions of dollars and there was a provision, I'm told, that was an attempt to limit executive compensation and that was killed."

Bailout Nation Editor Quits McGraw Hill By Barry Ritholtz - March 9th, 2009, 8:15PM I now have permission from the relevant parties to release this information: The week after McGraw Hill refused to publish the book as written, the editor I was working with there, Jeanne Glasser, resigned. Jeanne Glasser was the person who first approached me about doing this book. She was terrific to work with, and I had a wonderful relationship with her. She fought hard for the book, going up against corporate interests that had a different agenda than publishing a solid, hard hitting book. Given her...

WALLACE: The stock market has dropped 20 percent since the Obama inauguration. Can this now fairly be called the Obama bear market? MCCAIN: No, I -- I think I'd leave -- like to leave that up to the experts. But I do believe that a $1.2 trillion stimulus package -- add that to a $750 billion TARP, add that to this $480 billion supplemental, add it to another TARP that's coming down -- massive deficits, and we are committing generational theft. We are laying a debt on future generations of Americans. . . . . . WALLACE: Back in 2002,...

Bernanke testifies today and tells the market that the recession may be over this year and that we are not nationalizing the banks. Yahoo Market rallies, shorts get killed and Barry goes on TV to finish what Ben started today. People put money back in and then the big crash happens in the next month. Bernanke's Hide and Seek Delaying Tactics What's It Gonna Be? Confidence GONE: More Concealment by Government Here it Comes Verdict: No Confidence And even Krugman isn't sold..... Mysterious plans

SAN FRANCISCO (MarketWatch) - General Motors Corp. will offer the government the choice of giving it billions more in bailout money or seeing it file for bankruptcy when it presents a restructuring plan next week, according to a report published Saturday. The online edition of The Wall Street Journal, citing unnamed sources, said the competing choices present a dilemma for the Obama administration, which may fear seeing the industrial icon carmaker fall into bankruptcy and cut more jobs if it's refused more aid. The government has already committed $13.4 billion to GM as part of a federally-funded bailout. The automaker...

President Obama is back in messianic campaign mode. It is unbecoming. When he's not snarling at conservative opponents of his endless spending programs, he's pandering to supporters as the nation's community organizer-in-chief. At a stimulus rally in Ft. Myers, Fla., on Tuesday, a woman named Henrietta Hughes stood up to decry the mortgage crisis and ask Obama for his personal help. Choking back tears, she implored: "I have an urgent need. … We need a home, our own kitchen, our own bathroom." If she had more time, she probably would have remembered to ask Obama to fill up her gas...

Treasury postponing new financial rescue plan announcement to TuesdayWASHINGTON (MarketWatch) -- A key Obama administration official said Sunday that new, soon-to-be-announced financial measures by the Treasury will include creating incentives for the private sector to invest in troubled banks. "It can't all be private capital, but with the right kinds of government guarantees and the right kinds of financing, strategic approaches, [Treasury Secretary Timothy] Geithner believes we can bring in substantial private capital," said Obama's chief economic advisor Lawrence Summers on Fox News Sunday. One measure the Treasury is considering would create a "bad bank" or "aggregator bank" that would...

WASHINGTON (AP) — Regulators on Friday closed FirstBank Financial Services in Georgia and two California banks, Alliance Bank and County Bank, marking nine failures this year of federally insured institutions. The Federal Deposit Insurance Corp. was appointed receiver of the three banks. FirstBank Financial, based in McDonough, Ga., had $337 million in assets and $279 million in deposits as of Dec. 31. Alliance Bank, based in Culver City, Calif., had about $1.14 billion in assets and $951 million in deposits as of year's end. Merced, Calif.-based County Bank had around $1.7 billion in assets and $1.3 billion in deposits as...

I’m a hunter, and proud of it. Most of my best hours are spent in the field, sometimes chasing dangerous game. I’m on the track of one, a bigger more dangerous critter than I’ve ever hunted before: the Obama-Pelosi Porkosaurus. The Porkosaurus is plenty dangerous by itself. It subsidizes unemployment by increasing unemployment benefits. And, as the man said, when you subsidize something you get more of it. It doesn’t spend anything -- not one thin dime -- on the one thing that economists say is guaranteed to stimulate the economy, defense spending. And its whole purpose is to feed...

BY MARK MAREMONT In the latest effort to prop up a sector of the finance industry, federal regulators on Wednesday guaranteed $80 billion in uninsured deposits at the powerful institutions that service the nation's credit unions -- a maneuver that shows how the economic crisis continues to ripple across the U.S. Regulators also injected $1 billion of new capital into the largest of these wholesale credit unions, U.S. Central Federal Credit Union of Lenexa, Kan., after the firm on Wednesday posted an unexpected $1.1 billion loss for 2008. U.S. Central serves essentially as a main clearinghouse for the others in...

Add rental-car companies to the list of those seeking a federal bailout. Stagnant credit markets, slumping demand for travel and the automobile industry's hardships are hobbling rental-car companies like no other downturn since the modern industry emerged in the 1970s. Fewer travelers are renting cars. And rental-car companies are struggling to find buyers for their used automobiles -- an important source of revenue -- and secure financing to purchase new ones to replace them. Now, Avis Budget Group Inc., Hertz Global Holdings Inc. and other rental-car companies are lobbying Congress to allow them to use Troubled Asset Relief Program funds...

BY DAN FITZPATRICK and JOANN S. LUBLIN Bank of America Corp.'s handling of its acquisition of troubled Merrill Lynch & Co. has put Chairman and Chief Executive Kenneth Lewis on the hot seat with irate shareholders. Among those disappointed in the steep decline in the bank's stock are two veterans who helped Mr. Lewis rise to the top. Hugh McColl Jr., Bank of America's buccaneering former chairman and chief executive, who picked Mr. Lewis as his successor, and James Hance, the bank's former chief financial officer, privately have expressed disappointment in the types of risks taken by Bank of America...

Large financial institutions are expected to need more capital later this year. But after TARP money from the government runs out, where will the cash come from? BY DAVID ELLIS NEW YORK (CNNMoney.com) — Can anything satisfy banks' appetite for capital? Judging by the way things are going in the sector lately, the answer seems to be a resounding 'No.' Last week, the government allocated an additional $20 billion for the seemingly steady Bank of America (NYSE:BAC) to help the company close its acquisition of Merrill Lynch. BofA has now received $45 billion in government funds as part of the...

SAN FRANCISCO (MarketWatch) -- Berkeley, Ill.-based National Bank of Commerce was closed by regulators Friday, marking the first bank failure of 2009, the Federal Deposit Insurance Corporation said in a statement. Republic Bank of Chicago will assume all of National Bank of Commerce's deposits, while the two locations of National Bank of Commerce will reopen Saturday as branches of Republic Bank, the FDIC said.

BY DAN FITZPATRICK Bank of America Corp. Chief Executive Kenneth Lewis on Friday rejected the suggestion that he and his team did not conduct enough due diligence before agreeing to buy securities firm Merrill Lynch & Co., saying forecasts did not suggest Merrill's assets would drop so suddenly in value. "We did not expect the significant deterioration in mid to late December that we saw," he said on a conference call with analysts. The fourth-quarter decline at Merrill led to an agreement announced Friday giving Bank of America $20 billion in additional U.S. aid and a government guarantee to backstop...

BY ERIC DASH, LOUISE STORY, AND ANDREW ROSS SORKIN Kenneth Lewis gambled on bold acquisitions to build Bank of America into the nation's largest bank. But the need for fresh government support to grapple with the newly revealed losses at Merrill Lynch, the brokerage firm he snapped up in a rapid-fire arrangement at the height of the financial crisis in September, raises questions about whether the bank has gone a deal too far. Two weeks after closing its purchase of Merrill Lynch at the urging of U.S. regulators, the government cemented a deal at midnight Thursday to supply Bank of...

ABC News' Rick Klein and Dean Norland Report: House Minority Leader John Boehner needed only three words to serve notice that President-elect Barack Obama is nowhere close to achieving the big bipartisan vote on the stimulus package he wants so badly. "There was no Republican input at all involved in what House Democrats outlined today," Boehner, R-Ohio, said at a news conference at the Capitol. "I just took a moment to look over the draft from Chairman [David] Obey and the draft or outline from Chairman [Charlie] Rangel. Oh, my God.

WASHINGTON (MarketWatch) -- House Democrats, with the blessing of President-elect Barack Obama, are preparing a massive $825 billion economic stimulus bill loaded with federal spending and tax cuts, a more expensive package than initially estimated that is likely to face Republican criticism. The bill contains $550 billion in federal spending and $275 billion in tax cuts, but the numbers are subject to change. Read a summary. Democrats are seeking to spend $90 billion on highway, transit and other public-works projects, which they say will spur job creation. The bill also contains $102 billion aimed at helping workers find new jobs...

NEW YORK (MarketWatch) -- Bank of America shares lost more than a quarter of their value Thursday and traded at 17-year lows after a report that the government is dipping into its $700 billion bailout war chest to help the firm digest its acquisition of Merrill Lynch & Co.The Wall Street Journal reported late Wednesday that the Treasury Department decided to use money from its Troubled Asset Relief Program, or TARP, to help Charlotte, N.C.-based Bank of America because it feared the deal's failure could affect the stability of U.S. financial markets, the report said. Details are expected to be...